Credit Karma reinvents cash rewards with instant payback – TechCrunch
Credit Karma Money, a new checking and savings account from the company best known for its credit monitoring service, recently launched an important new feature. Called Instant Karma, the program rewards users by randomly refunding purchases. So far since the feature’s launch, Credit Karma claims to have rewarded 100,000 transactions, worth $ 5 million.
I spoke to Poulomi Damany, Managing Director of Credit Karma, who said the idea behind Credit Karma Money was to “change people’s relationship with money”. Credit Karma Instant Karma is an extension of this goal.
The process works differently from other cash back offers. On the one hand, this product is tied to a credit card rather than a credit card. Kyle Thibaut, chief product officer at Credit Karma, says it’s by design because their target population tends to stay away from credit cards. Second, the refund, while random, happens instantly. Swipe your card at a grocery store and, if this option is selected, the money spent on the transaction is instantly refunded.
“Gen Z don’t necessarily like credit cards,” Thibaut said. “When you talk to them, they love debit cards and debit cards are the way they spend. The use of debit cards is higher than that of credit cards in the United States, and it is actually increasing while the use of credit cards is decreasing. “
According to Damany and Thibaut, a large portion of Credit Karma’s 110 million members are millennials and this product, along with Credit Karma Money, is targeted to this demographic. They say this model fits better with the spending habits of this generation, who typically don’t optimize their spending to maximize credit card rewards.
At this time, the company refuses to share Credit Karma Money user numbers and the number of users who have received a refund from Instant Karma. Company says it’s saving those numbers for an upcoming earnings release – Credit Karma is owned by TurboTax maker Intuit.
Update: A previous version of this article stated that Instant Karma works with Credit Karma’s savings account. The company says the programs are different and the savings account program is renamed Savings Boost.